Swiss Re Ltd., the world’s second-biggest reinsurer, said Superstorm Sandy and other disasters cost the insurance industry $77 billion in 2012, making it the third-costliest year on record.
Sandy, which developed on Oct. 22 and left New York City without electricity for days, cost the industry about $35 billion, the Zurich-based reinsurer said today in a statement. Drought in the U.S. resulted in $11 billion of insured agricultural losses, it said.
“Sandy challenged the industry with its combination of record wind field and storm surge,” said Matthias Weber, Swiss Re’s chief underwriting officer, adding that the industry needs to do more to understand extreme storm surges.
While there were 318 catastrophic events last year, including 168 natural disasters, insured losses dropped almost 40 percent from record levels in 2011, when an earthquake and tsunami devastated parts of Japan.
A “rare and relatively weak series of earthquake shocks” in the north of Italy caused insured losses of more than $1.6 billion last year, the highest ever recorded in the country. Italy has one of the lowest earthquake insurance penetration rates among industrialized countries with high exposure to such risks, Swiss Re said.